BRIDGE LOANS EXPLAINED

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BRIDGE LOANS EXPLAINED
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• If the property that youre currently living in
  and are selling, is set to close only after you
  close and take possession of your next home (the
  one youre buying), then that can make it
  difficult to come up with the down payment for
  the property youre purchasing. This is where a
  bridge loan, or bridge financing, comes into
  play.
• In the majority of instances, most homeowners
  need to sell their existing property to make the
  down payment for their new home, and bridge
  financing gives you the opportunity to make a
  down payment without being forced to wait until
  the sale of your current home closes.

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• How do bridge loans work and what are the rules?
• Provided your current home has a firm sale on
  paper, youll find that most mortgage lenders and
  banks will loan you the required down payment to
  close your existing home, as well as the
  remaining money from the mortgage that youve
  been approved for. The following provision should
  be in place for you to be able to take advantage
  of bridge financing
• A firm sale on your current home, and
  confirmation of qualification for the new mortgage

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• Its also important to remember that a bridge
  loan is a short-term solution for the down
  payment, and that bridge financing terms apply to
  the down payment and not the mortgage. While
  bridge financing can be immensely helpful, it can
  get costly, so try to use it for a short period
  of time.
• What are the costs associated with bridge
  financing?
• There are three main price elements associated
  with bridge loans, they are as follows

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• Legal costs these typically range from 200 to
  300
• Lender fee this typically ranges from 400 to
  500
• Interest rate (prime 3 to 4)
• Generally speaking, a bridge loan will cost you
  somewhere between 1,000 and 2,000, although
  extenuating circumstances may bump this up, so
  beware. Talk to a professional mortgage advisor
  or broker for more guidance.
• What can you do other than seek a bridge loan?
• Unfortunately, if the sale and purchase of your
  existing and new homes cannot be made to coincide
  with one another, then youll need to find the
  money for the down payment from somewhere.

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• While some individuals may have enough money in
  savings to prevent them from having to use bridge
  financing, or be able to access a gift from a
  family member, most will not, and a bridge loan
  will be their only solution.
• The entire mortgage process can be confusing,
  costly and longwinded, so it pays to work with a
  professional broker or mortgage advisor to help
  you save money wherever you can, and to make
  intelligent financial decisions that take your
  personal circumstances into account, and are in
  line with your best interests.

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• Red Key Mortgage is located in Calgary, Alberta.
  We are a boutique brokerage with high volume
  serving hundreds of clients locally and
  nationwide every year. We have a number of
  associates dealing in mortgages as licensed by
  the Real Estate Council of Alberta. As a best
  mortgage broker in Calgary, Red Key Mortgage,
  will provide all of your available options from
  the entire mortgage market and allow you to make
  an educated decision where you'd like your
  mortgage to go. Red Key Mortgage works with big
  banks in Canada, as well as over a dozen other
  AAA lenders. Best of all, our services are paid
  for by the lenders at no additional cost to our
  clients. If you are looking for Calgary mortgage
  brokers, contact us today! We can't wait to get
  started.